Organisational Development Case Study of Coles Supermarket, SBM3305

This case study examines the organisational development of Coles Supermarket, a major Australian retailer. It begins with an introduction to organisational development and provides an overview of Coles, including its history, mission, and current market position. The study identifies key problems and challenges faced by Coles, such as increasing competition from both domestic and international retailers, rising costs, and the need to enhance customer experience. A SWOT analysis is conducted to evaluate Coles' strengths, weaknesses, opportunities, and threats. The study then explores strategies to affect change and development, including the implementation of new online portals, and discusses the role of structure and design in driving organisational development. The conclusion provides recommendations for Coles to improve its competitive position and achieve sustainable growth in the dynamic retail landscape. The assignment is a detailed analysis of the company's current position, internal and external factors, and recommendations for future development.

Organisational Development
Case study of Coles Supermarket

Table of Contents
Introduction.................................................................................................................................................3
Overview of the organisation.......................................................................................................................4
Problems and Challenges for the organisation.............................................................................................4
SWOT Analysis of Coles Supermarket.......................................................................................................6
Strategies to affect change and development...............................................................................................8
Role of Structure and Design in Change and Development.....................................................................8
Conclusion and Recommendations..............................................................................................................9
References.................................................................................................................................................10

Introduction
For every management professional the sole motto remains to drive organisational growth and
development. Every management professional is given the responsibility to stitch an effective
strategy that would help an organisation to put together the key resources available to the
organisation and address the organisational objectives in the best possible manner. Hence,
organisational development is one of major aspects that managers have to take into account. In
this highly competitive market environment it stands to be extremely important for companies to
have suitable and customised organisational strategy which would help to compete in the market.
In this scenario implementing all kinds of internal and external tools is important to achieve the
required result for an organisation (Ansoff et al., 2019). Coles Supermarket owned by
Wesfarmers is one of the leading grocery retailers in Australia and has been among the highest
selling brands in Australia. Even though Coles enjoys fair amount of market share but its
immediate competitors like Woolies, Aldi et cetera have increased market competition. Coles has
faced significant problems and business challenges which is extremely important to be addressed
through the utilisation of organisational development theories and internal and external analysis
tools (Knox, 2015). The main objective of the present study is to analyse the key problems and
business challenges faced Coles and to ensure effective implementation of management tools to
provide effective recommendations for visible organisational development.

Overview of the organisation
Coles Supermarket is one of the biggest retail giants operating in the Australian market. The
organisation is around 105 years old and operates over 850 locations all across the country.
Founded in 1914 the organisation slowly and steadily crossed each and every stair through
effective quality products and excellent customer service. The organisation has around 12000
employees working in the different locations and is considered one of the effective and largest
employers in the retail sector in Australia. Since its takeover by Wesfarmers in 2007 Coles has
expanded significantly in different countries which has increased sales and revenue substantially.
In the last few years Coles had to face significant competition from companies like Woolworths,
Aldi and certain organic food groceries who have effectively captured the market (Wheelen et
al., 2017). Even in competition the organisations stood strong with its effective mission, vision
and objectives.
The mission of the organisation is to “Gain customer satisfaction through better service and
operating excellence”. The organisation wants to become the number one retailer in the country
through effective and friendly service provided to the consumers. It also emphasises on
innovation that helps the organisation to achieve competitive advantage in the market. It clearly
states that innovation has to be at the core of operations in Coles to be at consumers’ disposal
and address their needs in the best possible manner. In the last few years with increasing
competition Coles has had to face hiccups in terms of business as there are number of aspects
which emerged in the market (Rothaermel, 2015). There have been questions on the operations
of Coles mostly from the ethical consumers and also about its business practice and corporate
governance which are some of the key business challenges faced by the organisation apart from
increasing competition.
Problems and Challenges for the organisation
A business has to keep up with the pace of changing trends in a market constantly to sustain. It
cannot be denied that the global retail industry is one of the most competitive industries in the
world and hence it is extremely essential for the players in the market to have effective strategy
working for them. Over the years the Australian retail market has become competitive with the
emergence of new retail organisations. Different companies follow different strategies which
affects the existing businesses to a large extent as they fail to cope up with the increasing

pressure in the market (Lasserre, 2017). Analysing every major market it is visible that new
companies bring strong challenges for the existing business. For instance, Tesco and Marks and
Spencer faced hard time with Aldi and Lidl. Wal-Mart had to make revamps to sustain in the US
market and similarly Coles has faced significant competition from companies like Aldi, IGA,
Star Mart et cetera. Hence, it could be said that competition is one of the significant challenges
for the organisation to sustain in the market. The challenge of competition has grown with time
as more and more companies settled in the Australian market. With competition coming into
picture innovation is a big aspect for change. Change is one of thing that is constant in different
industries and hence it is important to mention that for an organisation to sustain in the market it
is extremely important to change (Morschett, Schramm-Klein and Zentes, 2015). Coles
Supermarket as an organisation has to keep on changing their strategies to make sure they are
able to compete in this highly competitive market environment. With increasing competition
many companies have transformed to combat the new entrants in the market which brings the
stakeholders into the picture especially the investors in the market.
During this competition the modern heavyweight organisations have failed to cope up with price
deflation or the options of discount selling that created major setbacks for the organisations.
International competition has been a major problem for the Australian domestic market as
companies like Aldi, Lidl; Wal-Mart entered the market. There has also been an online e-
commerce company breathing over the necks of the Australian domestic companies which have
also affected the business options for companies like Coles. With online companies taking hold
over the market it can be stated that most of management scholars have predicted of substantial
downfall of the brick and mortar retail market (Morden, 2016). Hence, it is extremely important
for an organisation like Coles that has a legacy of over 100 years to understand its opportunities
and strengths to be able to mitigate the impact of competition in the market. Competition in the
online marketplace is unbelievable and what it does is developing a strong hold over the virtual
market. The recent initiation of business by US online behemoth Amazon marked the start of
independent sellers being able to directly sell their products through this company. This not only
affects grocery sales but also provides a huge competition for companies like Coles because they
are not able to compete in terms of price and now has to have a completely different approach to
the business strategy. Hence, online business launch by the international businesses is another
pure business challenge for the organisation (David and David, 2016). There are certain smaller

companies operating in the country which would largely hit by the entrance of online businesses
which create market of their own and also affect the operations of the other organisations. Hence,
it could be said that competition has to be managed by the organisation effectively to sustain in
the market for a long period of time (Hitt, Ireland and Hoskisson, 2016).
One of the major challenges that Coles had to face in the recent past is the increasing cost power.
Power costs has increased significantly over the last few years and the organisation has failed to
effectively understand the situation and develop suitable strategy which would help to combat
the rising power costs. In the recent past there has been significant scrutiny over the rising cost of
resources used by retail organisations which also show that the market is precarious in nature and
organisations to have effective internal and external strategy to sustain in the market. Large
prices stands to be a major problem for the organisations operating in the Australian retail
industry and every company is trying to address this issue to improve the sagging profits (Gao
and Su, 2016).
With the increase in competition suppliers have better options in terms of getting better prices
from the organisations. The new CEO of Wesfarmer, the parent company of Coles Supermarket
has frowned over the fact that suppliers have started to bargain more in terms of pricing and the
emerging organisations have cashed in on this situation by buying at a comparatively higher
price and selling at a lower margin which clearly affects the position of companies like Coles in
the market. Hence, it is extremely important to understand this kind of situation and accordingly
improve the strategies (Jenkins and Williamson, 2015).
A key problem that has affected not only Coles Supermarket but even Woolworths is to
understand how to improve customer experience. Understanding consumers is still a conundrum
but many organisations with the help of big data and analytics have been able to demystify
mindset of consumers but with changing markets it has become tougher. Talking in line with the
present issue it is also important to mention that preparing a competitive and efficient workforce
is a major challenge for the organisation as well (Goworek, McGoldrick and McGoldrick, 2015).
SWOT Analysis of Coles Supermarket
In order to address these problems and challenges it is important to understand the strengths of
the organisation and opportunities which would help to get visible organisational development.

The SWOT examination helps to analyse strengths, weaknesses, opportunities and threats which
provides effective insights to the company to make changes in its business strategy.
Strengths: Coles is considered as one of the leading retail organisations in Australia. The
organisation has a strong brand image which is effective in driving consumers towards its stores.
The organisation also has a strong capital structure that helps in effective resource allocation for
effective operations. Its long standing legacy has helped Coles to sustain in the market for a long
time and also enjoy substantial market share in Australia (Hübner, Holzapfel and Kuhn, 2015).
The nationalistic advertisement and brand management has helped to create the feeling of
nationalism among the consumers which is extremely effective for the organisation in this highly
competitive market. Effective presence all across the Australian market has helped the
organisation to address the needs and wants of the consumers. It also a strong research and
development team which plays a crucial role in managing the rising competition against this
organisation (Waddell et al., 2016).
Weaknesses: Poor supplier relationship has been a significant problem for the organisation in
the recent past. There are number of issues related to supply for the organisation which has
slackened its growth in the recent times. Its online business portal is another weak link for the
organisation. In this era of high competition which mainly comes from the online market it has
not been able to manage the online portal effectively to address the consumers’ needs online. The
technical flaws still remain to be a major problem for the organisation. There have been
complaints about workforce not being able to provide effective services to the consumers
especially on the communication level (Rashid and Ghose, 2015).
Opportunities: Foreign expansion opportunities would clearly work positively for the
organisation. It could also be said that improving quality level innovation would largely help the
organisation to effectively manage business operation. Improving workforce strategy is likely to
improve the organisational opportunities. Implementing better online strategy would help to
compete with not only the Australian market but also with the global market (Thompson,
Strickland and Gamble, 2015).
Threats: Emergence of discount retailers stands to be one of the major threats for the
organisation. It cannot be denied that companies like Aldi and Lidl have taken away major shares

from companies like Coles and Woolworths. The entry of online giants like Amazon is also a
threat (Rosenbaum-Elliott, Percy and Pervan, 2015).
Strategies to affect change and development
Coles has to operate in an extremely competitive situation which means the organisation has to
constantly make changes for organisational development. The implementation of new online
portal has been a key strategy to compete in the modern day market. In order to transform the
organisation to hi tech organisation this is important. The organisation focuses on implementing
a panel who would oversee the online operation of the organisation. The organisation has
planned an intensive training program which would directly contribute to the change and
development of the company. New leadership and workforce has helped to enforce the change
with the help of Lewin’s model of change which includes unfreeze, freezing and refreeze stages.
With new employees and leadership strategy that mainly follows democratic style of leadership
has helped to involve employees and communicate the need of change (Lasserre, 2017).
Bringing the new technology helps to freeze the change and then finally refreeze through
effective analysis of the results of change. Implementing the new online strategy and change is
an effective way of approaching development. Apart from that Coles also focuses on a high
growth approach through concentrated approach towards a niche market for certain class of
products which is another major change.
Role of Structure and Design in Change and Development
Organisational structure and design plays an important role in change and development. Coles in
order to enforce change has developed an open organisational structure which is flat in nature
and hence helps each and every employee to connect with the upper management that allows
coming up with suitable ideas during change and creates trust among the employees. The flat
organisational structure creates lesser barriers to communication and helps interact with the
different functional departments effectively. It could be said that easier the organisational
structure better is the result of change as leaders are able to motivate the employees through
friendly approach. The organisational design is a key aspect in change as it helps to manage the
work flow of the organisation (Knox, 2015). This manages the chain of command, span of
control and also decides on the centralization or decentralisation of power. In a highly
competitive market environment when a company like Coles is enforcing a change it becomes

important to make sure the chain of command is flexible in nature which would reduce barriers
of communication and each and every employee is free to ideate effectively. In order to gain
effective market share Coles has allowed formation of new departments that handles change and
centralised power which largely helps to implement the newly developed strategy with pure
contribution from the workforce. Hence, it could be said that organisational structure and design
is essential in change and development because they help to form the right connection with the
stakeholders especially with the employees, suppliers and investors which increases their faith on
the organisation (Ansoff et al., 2019).
Conclusion and Recommendations
From the above analysis it is clear that the Australian retail market is highly competitive in
nature and companies like Coles would perish even having a long standing legacy in the market
due to better options to the stakeholders in the market. It is important for the organisation Coles
to ensure it is able to address the challenges and problems faced which is only possible by
making subtle changes in its business strategy. After analysing the case of Coles Supermarket the
following recommendations could be made:
 The organisation should develop a strong multi level HR strategy which would help to
get effective effort from the employees.
 Intensive training program is also important to be implemented.
 The organisation should develop a strong IT panel which would oversee the online portal
and strategise the move against the immediate rivals.
 The organisation should directly deal with farmers that would help to offer lesser prices
to the consumers (Goffin and Mitchell, 2016).
 Improving supplier strategy through direct communication would be extremely effective
to meet the challenges.
 Focusing on differentiation based on price and product would help the organisation to
sustain in the market for a long period of time (Morden, 2016).

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